Bloomberg reported that ADNOC, the UAE’s national oil company, has reached an agreement to sell liquefied natural gas to Germany for a period of 15 years starting from 2028. This agreement is seen as a reinforcement of Europe’s reliance on fossil fuels and support for the UAE’s ambitions to be a significant supplier in the region.
Abu Dhabi National Oil Company (ADNOC) and the German government-owned energy group SEFE entered into a preliminary agreement for annual shipments of one million tons of liquefied natural gas. The LNG will be supplied from an export terminal in Ruwais, near Abu Dhabi, which ADNOC intends to establish, as announced by both companies in separate statements.
The UAE actively seeks agreements worldwide to increase its natural gas exports. In return, Germany has expedited its imports of LNG and swiftly procures shipments via maritime routes, due to reduced gas supplies via pipelines from Russia following the war in Ukraine.
Germany has acknowledged the vital role that gas will play soon, especially as it aims to phase out coal by the end of the current decade. Its long-term goal reportedly includes transitioning to clean energy sources and actively promoting the development of hydrogen infrastructure. Germany also appears to be striving for carbon neutrality by 2045.
Fatema Al Nuaimi, CEO of ADNOC LNG, said, “Gas accounts for nearly a quarter of Germany’s primary energy consumption, and we look forward to supporting its efforts to diversify energy sources and enhance energy security.”
A deeper look into the new ADNOC agreement
ADNOC’s agreement with SEFE depends on final investment decision for the liquefied natural gas project in Ruwais, expected by the Emirati company this year, as well as reaching a final sales and purchase agreement between the two parties. ADNOC has taken steps towards developing the facility by awarding initial engineering and construction contracts earlier this month.
Additionally, ADNOC previously entered into a 15-year agreement with China’s ENN for an annual supply of no less than one million tons of liquefied natural gas. The expected annual export capacity of the project is 9.6 million tons. ADNOC is already operating a facility with a capacity of 6 million tons on Das Island, which commenced operations in 1977.
SEFE has increased its gas supplies since being nationalized by the German government in 2022, previously a subsidiary of Gazprom PJSC. The company has secured agreements with Equinor ASA from Norway and Venture Global LNG Inc. to ensure a continuous flow of gas to industries and homes in Germany.
source: lualuatv
